Federal Reserve will keep federal funds rate at 0 to 1/4 percent

In a press release posted this week the Federal Open Market Committee reported about its decision to keep its target range for the federal funds rate at 0 to 1/4 percent. According to the Committee the economy conditions will likely warrant exceptionally low levels of the federal funds rate for some time. Meantime the economy worsened further since the Committee met in December.

The press release stated: “In light of the declines in the prices of energy and other commodities in recent months and the prospects for considerable economic slack, the Committee expects that inflation pressures will remain subdued in coming quarters. Moreover, the Committee sees some risk that inflation could persist for a time below rates that best foster economic growth and price stability in the longer term.”

Further it was noted that the Federal Reserve is determined to apply all available instruments in resuming sustainable economic growth and preserving price stability. The policy implemented by the Committee is aimed at supporting the functioning of financial markets as well as stimulating the economy through open market operations and other measures that are likely to keep the size of the Federal Reserve's balance sheet at a high level.